TIDMTXP
RNS Number : 2402L
Touchstone Exploration Inc.
12 May 2022
FIRST QUARTER 2022 FINANCIAL AND OPERATING RESULTS
CALGARY, ALBERTA (May 12, 2022) - Touchstone Exploration Inc. (
" Touchstone ", "we", "our", "us" or the " Company " ) (TSX, LSE:
TXP) reports its operating and financial results for the three
months ended March 31, 2022. Selected information is outlined below
and should be read in conjunction with our March 31, 2022 unaudited
interim condensed consolidated financial statements and related
Management's discussion and analysis, both of which will be
available under our profile on SEDAR ( www.sedar.com ) and on our
website ( www.touchstoneexploration.com ). Unless otherwise stated,
all financial amounts herein are rounded to thousands of United
States dollars .
First Quarter 2022 Financial and Operational Highlights
-- Achieved quarterly average production volumes of 1,396
barrels per day ("bbls/d"), representing a 4 percent increase
relative to the preceding quarter and an 8 percent increase from
the 1,297 bbls/d produced in the first quarter of 2021.
-- Realized petroleum sales of $10,496,000 from an average crude
oil price of $83.55 per barrel compared to petroleum sales of
$8,212,000 from average realized pricing of $66.81 per barrel in
the fourth quarter of 2021.
-- Generated an operating netback of $37.83 per barrel, a 26
percent increase from the fourth quarter of 2021 and a 72 percent
increase from the $21.98 per barrel reported in the first quarter
of 2021.
-- Our funds flow from operations improved to $1,426,000 in the
quarter compared to $1,291,000 recognized in the fourth quarter of
2021 and $538,000 reported in the first quarter of 2021.
-- Recognized a net loss of $236,000 and comprehensive income of
$164,000, compared to a net loss of $460,000 and comprehensive loss
of $415,000 reported in the same period of 2021.
-- Capital investments of $2,554,000 focused on continuing
production testing operations on the Royston-1 well, expenditures
related to the Coho-1 facility and pipeline and lease preparation
costs for two Coora development well locations.
-- Exited the quarter with cash of $10,148,000, a working
capital surplus of $4,259,000 and $30,000,000 drawn on our term
credit facility, resulting in a net debt position of
$21,241,000.
-- In March 2022, our field development plan for the Cascadura
area was approved, which extends the exploration and production
period for the defined 2,378-acre area through October 31,
2039.
Post Period-End Highlights
-- Daily crude oil sales averaged 1,532 bbls/d in April 2022
with a realized price of $91.79 per barrel.
-- Coho pipeline has been welded, with trenching operations
progressing toward anticipated initial production within four to
six weeks.
-- The National Gas Company of Trinidad and Tobago ("NGC") has
agreed to purchase the Coho pipeline upon completion and
commissioning.
-- Received a review and assessment report in response to our
Cascadura area Environmental Impact Assessment ("EIA") application
with no material deficiencies raised.
-- NGC has received regulatory approval to construct a 20-inch
natural gas pipeline from our Cascadura surface facility to their
onshore transmission pipeline network.
Paul Baay, President and Chief Executive Officer, commented:
"Our first quarter results reflected a combination of increased
commodity pricing and higher production volumes from our legacy
crude oil properties. Our near-term priority is to bring our Coho
and Cascadura exploration discoveries onto production, with a focus
on converting our extensive Trinidad reserve base to sustainable
long-term cash flows to fund our portfolio of future development
and exploration opportunities. We are forecasting first gas from
Coho imminently, which will represent the initial step change in
our production profile. With the approval of our Cascadura field
development plan and our EIA in the final stages of documentation
and clarification, we are making progress toward bringing our
Cascadura discovery onto production. We thank our shareholders for
their continued support and look forward to providing further
updates as we proceed to execute our 2022 strategy."
First Quarter 2022 Financial and Operating Results Summary
Three months ended % change
March 31,
------------------------------------------ ---------
2022 2021
------------------------------------------ --------- ---------- ---------
Operational
Average daily crude oil production(1)
(bbls/d) 1,396 1,297 8
Dated Brent benchmark price ($/bbl) 100.87 61.04 65
Operating netback ($/bbl)
Realized sales price (2) 83.55 52.43 59
Royalties (2) (28.55) (15.79) 81
Operating expenses(2) (17.17) (14.66) 17
------------------------------------------ --------- ---------- ---------
Operating netback (2) 37.83 21.98 72
------------------------------------------ --------- ---------- ---------
Financial ($000's except per share
amounts)
Petroleum sales 10,496 6,120 72
Cash from (used in) operating activities 333 (1,234) n/a
Funds flow from operations 1,426 538 165
Per share - basic and diluted(2) 0.01 0.00 n/a
Net loss (236) (460) (49)
Per share - basic and diluted (0.00) (0.00) -
Exploration capital expenditures 1,874 2,954 (37)
Development capital expenditures 680 127 435
------------------------------------------ --------- ---------- ---------
Capital expenditures 2,554 3,081 (17)
------------------------------------------ --------- ---------- ---------
Working capital surplus(2) (4,259) (10,552) (60)
Principal long-term balance of term
loan 25,500 7,500 240
Net debt (surplus)(2) - end of period 21,241 (3,052) n/a
------------------------------------------ --------- ---------- ---------
Share Information (000's)
Weighted average shares outstanding
- basic and diluted 210,823 209,400 1
Outstanding shares - end of period 211,164 209,400 1
Notes:
(1) References to crude oil in the above table and elsewhere in
this announcement is a mix of light and medium crude oil and heavy
crude oil for which there is not a precise breakdown since our oil
sales volumes typically represent blends of more than one type of
crude oil.
(2) Non-GAAP financial measure. See "Advisories: Non-GAAP
Financial Measures" for further information.
Operational Update
Coho
Our pipeline and facilities project at Coho is progressing, and
the pipeline has been strung out and welded along the right-of-way.
Trenching has commenced, and approximately 4,000 feet has been
buried to date.
Cascadura
In March 2022, the Trinidad and Tobago Ministry of Energy and
Energy Industries approved our field development plan for the
Cascadura area, which extends the exploration and production period
for the defined 2,378-acre area through October 31, 2039.
We are progressing with facilities procurement and construction
of the Cascadura natural gas facility and liquids pipeline. We
received a review and assessment report in response to our
Cascadura area EIA from the Trinidad and Tobago Environmental
Management Authority on May 5, 2022. We anticipate submitting the
additional information request on May 13, 2022. Upon final approval
of the EIA, we expect to immediately proceed with construction of
the surface facility, access roads and future development drilling
locations.
Royston
We are concluding the extended production test of our Royston-1
exploration well, with the well shut-in for a pressure build-up.
Our proposed future Royston-1 drilling operations include
re-entering the existing wellbore to abandon the lowest section of
the well and sidetrack the well to evaluate the intermediate sheet
and potentially the subthrust sheets in the Herrera Formation.
Annual Meeting of Shareholders
We will be holding our 2022 Annual Meeting of Shareholders (the
"Meeting") on Thursday, June 9, 2022 at 10:00 a.m. (Mountain time).
To continue to mitigate risks to the health and safety of our
communities, shareholders, employees and other stakeholders amid
ongoing concerns regarding the coronavirus pandemic, we are holding
a virtual-only Meeting which will be conducted via live audio
webcast. Every shareholder and duly appointed proxyholder,
regardless of geographic location and ownership, will have an equal
opportunity to participate in the Meeting online and vote on the
matters to be considered at the Meeting. You cannot attend the
Meeting in person. Details on how to attend the virtual-only
Meeting are as follows:
-- Go to https://web.lumiagm.com/249639854 in your web browser.
-- If you have voting rights, select "Login" and enter your
username and the password "touchstone2022" (case sensitive).
-- If you do not have voting rights, select "Guest" and complete the online form.
Further details on how to attend the Meeting are included on our
website. The meeting materials, including our Notice of 2022 Annual
Meeting of Shareholders and Management Information Circular dated
April 29, 2022, are available on our website (
www.touchstoneexploration.com/investors/shareholder-meetings ) and
under our profile on SEDAR ( http://www.sedar.com/ www.sedar.com ).
The meeting materials were mailed to shareholders on May 10,
2022.
Touchstone Exploration Inc.
Touchstone Exploration Inc. is a Calgary, Alberta based company
engaged in the business of acquiring interests in petroleum and
natural gas rights and the exploration, development, production and
sale of petroleum and natural gas. Touchstone is currently active
in onshore properties located in the Republic of Trinidad and
Tobago. The Company's common shares are traded on the Toronto Stock
Exchange and the AIM market of the London Stock Exchange under the
symbol " TXP " .
For further information about Touchstone, please visit our
website at www.touchstoneexploration.com or contact:
Touchstone Exploration Inc.
Mr. Paul Baay, President and Chief Executive Officer Tel: +1
(403) 750-4487
Mr. Scott Budau, Chief Financial Officer
Mr. James Shipka, Chief Operating Officer
Shore Capital (Nominated Advisor and Joint Broker)
Daniel Bush / Toby Gibbs / Michael McGloin Tel: +44 (0) 207 408
4090
Canaccord Genuity (Joint Broker)
Adam James / Henry Fitzgerald O'Connor / Thomas Diehl Tel: +44 (0) 207 523 8000
Camarco (Financial PR)
Billy Clegg / Emily Hall / Lily Pettifar Tel: +44 (0) 203 781
8330
Advisories
Non-GAAP Financial Measures
Certain financial measures in this announcement do not have a
standardized meaning as prescribed by International Financial
Reporting Standards ("IFRS" or "GAAP") and therefore are considered
non-GAAP financial measures. These financial measures may not be
comparable to similar financial measures disclosed by other
issuers. Readers are cautioned that any non-GAAP financial measures
referred to herein should not be construed as alternatives to, or
more meaningful than, measures prescribed by IFRS and they are not
meant to enhance the Company's reported financial performance or
position. These are complementary measures that are commonly used
in the oil and natural gas industry and by the Company to provide
shareholders and potential investors with additional information
regarding the Company's performance, liquidity and ability to
generate funds to finance its operations. Below is a description of
the non-GAAP financial measures, non-GAAP ratios, capital
management measures and supplementary financial measures disclosed
herein.
Funds flow from operations and funds flow from operations per
share
Funds flow from operations is included in the Company's
consolidated statements of cash flows. Touchstone considers funds
flow from operations to be a key measure of operating performance
as it demonstrates the Company's ability to generate the funds
necessary to finance capital expenditures and repay debt.
Management believes that by excluding the temporary impact of
changes in non-cash operating working capital, funds flow from
operations provides a useful measure of the Company's ability to
generate cash that is not subject to short-term movements in
non-cash operating working capital.
Funds flow from operations per share is a non-GAAP ratio
calculated by dividing funds flow from operations by the weighted
average number of common shares outstanding during the applicable
period on a basic and dilutive basis.
Operating netback
The Company uses operating netback as a key performance
indicator of field results. The Company considers operating netback
to be a key measure as it demonstrates Touchstone's profitability
relative to current commodity prices and assists Management and
investors with evaluating operating results on a historical basis.
Operating netback is a non-GAAP financial measure calculated by
deducting royalties and operating expenses from petroleum sales.
Operating netback per barrel is a non-GAAP ratio calculated by
dividing the operating netback by total crude oil sales volumes for
the period.
Working capital and net debt
Touchstone closely monitors its capital structure with a goal of
maintaining a strong financial position to fund current operations
and future growth. These are capital management measures used by
Management to steward the Company's overall debt position and as
measures of overall financial strength.
Management monitors working capital and net debt as part of the
Company's capital structure to assess its true debt and liquidity
position and to manage capital and liquidity risk. Working capital
is calculated as current assets minus current liabilities as they
appear on the consolidated statements of financial position. Net
debt (surplus) is calculated by summing the Company's working
capital and the principal (undiscounted) long-term amount of senior
secured debt.
Supplementary Financial Measures
The following supplementary financial measures are disclosed
herein.
Realized sales price per barrel - is comprised of petroleum
sales as determined in accordance with IFRS, divided by the
Company's total crude oil sales volumes for the period.
Royalties per barrel - is comprised of royalties as determined
in accordance with IFRS, divided by the Company's total crude oil
sales volumes for the period.
Operating expenses per barrel - is comprised of operating
expenses as determined in accordance with IFRS, divided by the
Company's total crude oil sales volumes for the period.
Refer to the "Non-GAAP Financial Measures" advisory section in
the Company's March 31, 2022 Management's discussion and analysis
for reconciliations of non-GAAP financial measures included herein
to applicable GAAP measures.
Forward-Looking Statements
Certain information provided in this announcement may constitute
forward-looking statements and information (collectively,
"forward-looking statements") within the meaning of applicable
securities laws. Such forward-looking statements include, without
limitation, forecasts, estimates, expectations and objectives for
future operations that are subject to assumptions, risks and
uncertainties, many of which are beyond the control of the Company.
Forward-looking statements are statements that are not historical
facts and are generally, but not always, identified by the words
"expects", "plans", "anticipates", "believes", "intends",
"estimates", "projects", "potential" and similar expressions, or
are events or conditions that "will", "would", "may", "could" or
"should" occur or be achieved.
Forward-looking statements in this announcement may include, but
are not limited to, statements relating to Touchstone's near-term
priorities, the Company's development and exploration plans and
strategies, including anticipated future production, the receipt of
anticipated regulatory approvals, anticipated future drilling
operations and timing thereof , and Touchstone's current and future
financial position including the sufficiency of resources to fund
future capital expenditures and maintain financial liquidity.
Although the Company believes that the expectations and assumptions
on which the forward-looking statements are based are reasonable,
undue reliance should not be placed on the forward-looking
statements because the Company can give no assurance that they will
prove to be correct. Since forward-looking statements address
future events and conditions, by their very nature they involve
inherent risks and uncertainties. Actual results could differ
materially from those currently anticipated due to a number of
factors and risks. Certain of these risks are set out in more
detail in the Company's 2021 Annual Information Form dated March
25, 2022 which is available under the Company's profile on SEDAR (
www.sedar.com ) and on the Company's website (
www.touchstoneexploration.com ). The forward-looking statements
contained in this announcement are made as of the date hereof, and
except as may be required by applicable securities laws, the
Company assumes no obligation to update publicly or revise any
forward-looking statements made herein or otherwise, whether as a
result of new information, future events or otherwise.
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END
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